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E-book Contract Farming in Developing Countries
Contract farming—described broadly as an institutional arrangement between farmers and businesses to produce and transact agricul-tural commodities against predetermined conditions—is not a recent phenomenon. Yet, a recent wave of agricultural industrialization and the emergence of large-scale food retailing in developing countries may have precipitated a renewed shift in favor of contract farming on a scale that is probably unprecedented. Changing tastes of consumers, higher demand for processed foods, and the globalization of agroindustry, each in their own way, have contributed to this redefining of producer-processor rela-tionship in these countries (Barrett et al. 2020; Bellemare et al. 2022; Birthal et al. 2005; de Brauw and Bulte 2021; Reardon et al. 2003; Ruben et al. 2006; Swinnen 2007; Timmer 2009). There is relatively less disagreement today about what contract farming means or indeed why it emerges in the first place. In stark contrast, there is deep disagreement on whether contract farming is a “good thing”. At one end of the spectrum, contract farming is seen as a vehicle for smallholders in developing countries to take advantage of opportunities that a glob-alizing trade system has to offer, notably, in non-traditional high-value crops. Against a background of persistent agrarian distress in resource-poor regions, advocates enthuse, perhaps rightly, over the changes such firm-farm linkages could bring. In particular, contract farming could solve a number of pressing problems at once—providing market access, inputs, technology, insurance and even specific entrepreneurial skills (Glover 1984; Goldsmith 1985; Morrissy 1974; Williams and Karen 1985). It is thus presented as a win-win situation, with both farmer and agribusi-ness standing to prosper (Eaton and Shepherd 2001). At the opposite end, many claim that it supplants traditional structures of production and exchange in a way that produces more iniquitous power relations, exac-erbating social differentiation and even proletarianizing the independent farmer (Niño and Oya 2021; Glover 1990; Little 1994; Singh 2002a). There are also relevant questions about corporate commitment, or rather the lack of it, to the long-term ecological and social consequences of these arrangements..
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